UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM 8-K/A
AMENDMENT NO. 1
TO
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
DATE OF REPORT: JULY 3, 1996
CONSOLIDATED GRAPHICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
TEXAS 0-24068
(STATE OR OTHER JURISDICTION OF (COMMISSION FILE NUMBER)
INCORPORATION)
76-0190827
(I.R.S. EMPLOYER IDENTIFICATION NO.)
2210 WEST DALLAS STREET
HOUSTON, TEXAS
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
77019
(ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 529-4200
The undersigned registrant hereby amends Item 2. Acquisition or Disposition
of Assets and Item 7. Financial Statements and Exhibits of its Current Report on
Form 8-K dated July 3, 1996, as originally filed, with respect to the
acquisition by Consolidated Graphics, Inc. (the "Company") of Garner Publishing
Company ("Garner Printing") on July 3, 1996 (the "Garner Acquisition").
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On July 3, 1996, the Company acquired all of the issued and outstanding
stock of Garner Printing, a commercial printing company located in Des Moines,
Iowa. The Company issued 177,780 shares of its common stock in connection with
the acquisition. The Company expects to continue operating Garner Printing
without making any significant changes in its operations.
The Company has accounted for the Garner Acquisition as a purchase. The
allocation of purchase price to the assets acquired was based on estimates of
fair market values and may be revised when additional information that the
Company is awaiting concerning asset and liability values is obtained.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(A) Financial statements of business acquired.
The information contained in Exhibit 6 hereto is incorporated herein by
reference.
(B) Pro forma financial information.
The following unaudited pro forma financial statements give effect to the
Company's acquisition of Garner Printing. The unaudited pro forma financial
statements presented below were prepared utilizing the audited historical
financial statements of the Company and Garner Printing. The unaudited pro forma
financial statements should be read in conjunction with the audited historical
financial statements and notes thereto of Garner Printing for the year ended
December 31, 1995 incorporated herein and the Company's audited historical
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the fiscal year ended March 31, 1996 previously filed with the
Securities and Exchange Commission. The pro forma financial statements do not
purport to be indicative of the Company's financial position or results of
operations that would have occurred had the transaction been completed as of or
at the beginning of the periods presented, nor do such statements purport to
indicate the Company's financial condition or results of operations at any
future date or for any future period.
2
CONSOLIDATED GRAPHICS, INC.
UNAUDITED PRO FORMA BALANCE SHEET
(IN THOUSANDS)
THE UNAUDITED PRO FORMA BALANCE SHEET PRESENTED BELOW REFLECTS
THE FINANCIAL POSITION OF THE COMPANY AS OF MARCH 31, 1996,
TOGETHER WITH THE FINANCIAL POSITION OF GARNER PRINTING AS OF DECEMBER 31, 1995
HISTORICAL
----------------------
GARNER PRO FORMA COMPANY
COMPANY PRINTING ADJUSTMENTS PRO FORMA
--------- --------- ------------ -------------
(AUDITED) (AUDITED)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents....... $ 3,086 $ 149 $ -- $ 3,235
Accounts receivable, net........ 19,317 2,022 -- 21,339
Inventories..................... 8,023 418 -- 8,441
Prepaid expenses................ 1,077 19 -- 1,096
--------- --------- ------------ -------------
Total current assets....... 31,503 2,608 -- 34,111
PROPERTY AND EQUIPMENT, net.......... 50,591 3,533 3,228(a) 57,352
GOODWILL, net........................ 5,015 -- 71(b) 5,086
OTHER ASSETS......................... 700 -- -- 700
--------- --------- ------------ -------------
$87,809 $ 6,141 $ 3,299 $97,249
========= ========= ============ =============
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term
debt.......................... $ 1,221 $ 1,360 $ -- $ 2,581
Accounts payable................ 5,719 829 -- 6,548
Accrued liabilities............. 5,648 544 100(c) 6,292
Income taxes payable............ 60 -- -- 60
--------- --------- ------------ -------------
Total current
liabilities............. 12,648 2,733 100 15,481
LONG-TERM DEBT, net of current
portion............................ 20,105 1,507 -- 21,612
DEFERRED INCOME TAXES................ 5,180 -- 967(d) 6,147
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Common stock.................... 59 15 (13)(e) 61
Additional paid-in capital...... 32,762 110 4,021(e) 36,893
Retained earnings............... 17,055 1,776 (1,776)(e) 17,055
--------- --------- ------------ -------------
Total shareholders'
equity.................. 49,876 1,901 2,232 54,009
--------- --------- ------------ -------------
$87,809 $ 6,141 $ 3,299 $97,249
========= ========= ============ =============
Note: Certain reclassifications were made to the historical financial statements
of Garner Printing for purposes of clear and consistent presentation.
See footnotes on page 4.
3
CONSOLIDATED GRAPHICS, INC.
NOTES TO UNAUDITED PRO FORMA BALANCE SHEET
(a) Reflects the additional value assigned, pursuant to purchase accounting
rules, to the property and equipment of Garner Printing.
(b) Reflects the value assigned, pursuant to purchase accounting rules, to
goodwill in connection with the Garner Acquisition.
(c) Reflects estimated costs incurred by the Company in connection with the
Garner Acquisition.
(d) Reflects the amount of additional deferred taxes to be recorded in
connection with the Garner Acquisition pursuant to purchase accounting rules
and Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes".
(e) Reflects the elimination of the historical shareholders' equity of Garner
Printing pursuant to purchase accounting rules and the issuance of 177,780
shares of the Company's common stock, valued at $23.25 per share, as
consideration in the transaction.
4
CONSOLIDATED GRAPHICS, INC.
UNAUDITED PRO FORMA INCOME STATEMENTS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
FOR THE YEAR ENDED MARCH 31, 1996 OF THE COMPANY TOGETHER WITH THE YEAR ENDED
DECEMBER 31, 1995 OF GARNER PRINTING, ASSUMING THE GARNER ACQUISITION
OCCURRED AS OF THE BEGINNING OF THE ENTITY'S FISCAL YEAR.
HISTORICAL
---------------------------
GARNER PRO FORMA COMPANY
COMPANY PRINTING ADJUSTMENTS PRO FORMA
----------- ------------ ------------ ----------
(AUDITED) (AUDITED)
SALES................................ $85,133 $ 12,673 $-- $ 97,806
COST OF SALES........................ 61,237 9,756 (206)(a) 70,787
----------- ------------ ------------ ----------
Gross profit.................... 23,896 2,917 206 27,019
SELLING EXPENSES..................... 8,532 1,016 -- 9,548
GENERAL AND ADMINISTRATIVE
EXPENSES........................... 6,873 1,008 (173)(b) 7,708
RESTRUCTURING CHARGE................. 1,500 -- -- 1,500
----------- ------------ ------------ ----------
Operating income................ 6,991 893 379 8,263
INTEREST EXPENSE..................... 876 273 -- 1,149
INTEREST INCOME...................... (16) -- -- (16)
----------- ------------ ------------ ----------
Income before provision for
income taxes.................. 6,131 620 379 7,130
PROVISION FOR INCOME TAXES........... 2,146 -- (c) 379(c) 2,525
----------- ------------ ------------ ----------
NET INCOME........................... $ 3,985 $ 620 $-- $ 4,605
=========== ============ ============ ==========
EARNINGS PER SHARE OF COMMON STOCK... $ .72 $ .81(d)
=========== ==========
Note: Certain reclassifications were made to the historical financial
statements of Garner Printing for purposes of clear and consistent
presentation.
See footnotes on page 6.
5
CONSOLIDATED GRAPHICS, INC.
NOTES TO UNAUDITED PRO FORMA INCOME STATEMENTS
(a) Reflects a net reduction in depreciation and amortization expense associated
with the Garner Acquisition. Pro forma depreciation and amortization expense
was determined based on a preliminary allocation of the purchase price to
the operating assets acquired based on estimates of fair values and an
estimate of useful lives ranging generally from 3 to 15 years.
(b) Reflects the elimination of certain payments to and on behalf of the selling
shareholders of Garner Printing which will not be incurred prospectively
pursuant to agreement.
(c) Garner Printing operated under S-corporation status for federal and state
income tax purposes prior to the acquisition. Accordingly, no provision for
income tax expense is reflected in Garner Printing's historical financial
statements and an adjustment for pro forma federal and state income tax
expense has been made.
(d) Pro forma earnings per share was calculated based on the historical weighted
average shares of the Company outstanding for the year ended March 31, 1996
of 5,534,180 plus 177,780 shares issued in connection with the Garner
Acquisition.
6
(C) Exhibits.
The following additional exhibits to the report are furnished with this
amendment:
5 -- Consent of Denman & Company, L.L.P.
6 -- Financial Statements of Garner Publishing Company,
including independent auditor's report.
7
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this amendment to be signed on its behalf by the
undersigned, thereunto duly authorized.
CONSOLIDATED GRAPHICS, INC.
(REGISTRANT)
By /s/ G. CHRISTOPHER COLVILLE
-----------------------
G. Christopher Colville
VICE PRESIDENT -- MERGERS AND
ACQUISITIONS
CHIEF FINANCIAL AND ACCOUNTING
OFFICER
Date: August 13, 1996
8